Stablecoins are dominating market share in the crypto ecosystem, as Bitcoin (BTC) continues to gain adoption. This, according to a report from Chainalysis which also noted that merchant services are now thriving in Central, Northern, and Western Europe.
Central, Northern, & Western Europe (CNWE), the “second largest crypto economy in the world after North America, has reportedly received $987.25 billion in value on-chain between July 2023 and June 2024, accounting for 21.7% of global transaction volume.”
Most countries in CNWE saw crypto activity grow, averaging “a 44% growth rate year-over-year (YoY).”
The United Kingdom (UK) remains CNWE’s largest cryptocurrency economy, “receiving $217 billion in crypto, and ranking 12th in our global crypto adoption index.”
For transactions below $1 million — i.e., professional ($10K-$1M) and retail (<$10K) transfers — Bitcoin (BTC) saw “nearly 75% growth, the highest of all asset types in CNWE. Across all transaction sizes, BTC accounted for $212.3 billion — roughly one-fifth — of CNWE’s total value received on-chain.”
Although CNWE’s BTC activity for transactions below $1 million grew at “a lower rate than North America’s as seen in the [data shared,] the former outpaced the latter in growth across all other asset types, particularly in stablecoins.”
For transfers less than $1 million, CNWE saw growth in stablecoin volume 2.5x greater than North America. CNWE’s stablecoin value “across all transaction sizes accounted for almost half ($422.3 billion) of its total crypto inflows.”
Looking at average monthly inflows, the chart below shows how stablecoin transfers “below $1 million performed in the past year, averaging between $10-$15 billion monthly.”
Chainalysis further noted that though inflows decreased in May and June of 2024, the share of stablecoin transactions increased, indicating strong “usage despite the post-bull run market decline.”
Looking back further at the last two years in CNWE, stablecoins have dominated “other asset types.”
The available data from Chainalysis indicates that purchases made for “less than $1 million by asset type. As we can see, stablecoins averaged a 52.36% share of transactions across asset types between July 2022 and June 2024.”
In the past year, CNWE’s share of stablecoin purchases with fiat currency was reportedly said to be “disproportionately greater” than that of BTC.
The available insights use order book data — a list of buy and sell orders for an asset or security — to complement on-chain activity, and shows the euro (EUR) has “a 24% share of stablecoin purchases traded with fiat currencies, but only a 6% share of BTC purchases. Conversely, the U.S. dollar (USD) has a larger share of BTC purchases than it does stablecoin purchases.”
Chainalysis caught up with BVNK, a global company offering a multi-asset platform for stablecoin payments.
Chris Harmse, co-founder and chief business officer at BVNK, said that their fiat business is in service of our stablecoin platform. They think they coexist, and they “need to bridge the gap into the fiat world.”
Harmse confirmed that Chainalysis’ findings on the region’s stablecoin usage were “consistent with the company’s observations. BVNK’s business clients buy stablecoins to meet a variety of payments use cases. As for those businesses’ consumers, 90% of their payments are made using stablecoins. We’ll share more about BVNK in the next section.”
CNWE has the second largest merchant service market in the world next to CSAO, “driven primarily by the UK, which saw 58.4% growth YoY.”
Stablecoins are the most commonly used asset type in these services, consistently “accounting for 60-80% of the market share each quarter.”
Share of total value received by UK based merchant services according to asset type
As one such merchant service provider enabling stablecoin transactions for businesses in the UK and Europe, BVNK covers B2B and B2B to consumer (B2B2C) use cases, such as the following examples:
- Settlements: Fintech or payment service providers help merchants settle invoices, offering payment rails that are faster and cheaper than those in traditional finance (TradFi).
- Pay-ins: When consumers want to pay a business using stablecoins (e.g., making a deposit on a trading platform, topping up a gaming or sports betting account, or making an online purchase), BVNK’s business customers leverage an API to deliver a crypto payment gateway.
- Payouts: Money service businesses (MSBs) use stablecoins to pay contractors or employees, many of whom live in South America, experience currency devaluation, and/or don’t have access to the U.S. dollar.
Speaking of which, citizens in countries like Argentina — which saw 143% inflation in the second half of 2024 — “are turning to stablecoins to mitigate the effects of currency devaluation.”
The average transaction size BVNK sees on its platform is “between $100K and 250K, and payments in that range are typically large business transactions used to settle invoices, as described above. Most B2B transactions the company processes are cross-border payouts, with the majority of stablecoin payments going to Latin America. Consumer payments processed through BVNK’s platform range between $100 and $1K.”
When asked about new or surprising stablecoin use cases, Harmse mentioned micropayments to freelancers in the gig economy — again, these are “typically cross-border payments for which traditional payment methods would be too cost-prohibitive.”
He also mentioned the region is starting to see more “nonprofits and NGOs using crypto payouts — in stablecoins specifically — in times of crisis, to get aid to conflict zones more quickly.”
Chainalysis further noted that Payhound is another company in CNWE offering merchant services. It’s a Malta-based crypto payment processor “serving the country’s online gaming industry, and offers settlements and large-volume trading. While the latter drives most of Payhound’s revenue, the company also recognizes the value and potential of its payment processing product.”
Regional professionals this year shared that real-world asset (RWA) tokenization, while nascent, is gaining traction in CNWE.
Philipp Bohrn is VP, public and regulatory affairs at Bitpanda, a cryptocurrency exchange based in Austria explained that across Europe, they are seeing tokenization projects for RWAs gaining traction, particularly in sectors such “as real estate, intellectual property and collectibles such as art, cars or wine.”
As shared by Chainalysis, Sylvain Prigent, chief product officer at Societe Generale-FORGE (SG-FORGE) a fully integrated and regulated subsidiary of Societe Generale Group. SG-FORGE is paving the way in security token adoption, notably with its “first digital green bond issuance directly registered on the Ethereum public blockchain last year with increased transparency and traceability on ESG data.”
Prigent thinks that security tokens and RWAs in general will create “an accessible investment opportunity in the traditionally competitive securities market.”
Chainalysis concluded that a lot of development has been done to “make this new infrastructure smoothly available to TradFi, according to Prigent.”